When IRP does not hold: Multiple Choice it may be the result of government-imposed capital controls....
When IRP does not hold:
Multiple Choice
-
it may be the result of government-imposed capital controls.
-
All of the options.
-
arbitrageurs should bring exchange rates and interest rates back into line.
-
the reason may be the imposition of cross-border arbitrage restrictions.
-
the explanation may be due to transactions costs.
Homework Answers
Ans All of the options.
When IRP does not hold it may be the result of government-imposed capital controls, arbitrageurs should bring exchange rates and interest rates back into line, the reason may be the imposition of cross-border arbitrage restrictions, the explanation may be due to transactions costs.
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